Beyond the boring blockchain bubble

https://techcrunch.com/2017/08/06/beyond-the-boring-blockchain-bubble/

by shanev • 9 years ago

139 140 9 years ago

One interesting aspect of ICO's is that the owners don't necessarily need to build a business. It's far less work to skim the money and say the business failed. And until anyone goes to jail for doing that, it remains a lucrative opportunity.

Raising $120M in an ICO isn't the same as raising $120M from a VC. In the latter case, you get nothing if the business fails.

The big question is, why are people dumping so much more money into ICOs than into Kickstarter projects? Why does an ICO seem so much more legit? It's mostly the same thing. Yet ICOs are somehow raising 10x more than the most-funded Kickstarters without breaking a sweat.

jeremyt• 9 years ago

Because you can flip coins for a profit. Can't do that on kickstarter.

fapjacks3• 9 years ago

Because it's actually pretty difficult to withdraw $40 million worth of Ethereum, and so people that are massively successful in BTC/ETH/LTC are able to just park some of their excess in these ICOs on the off-chance one of them is a hit.

hossbeast• 9 years ago

This, exactly. Crypto Inception, as the piece puts it.

anovikov4• 9 years ago

That is a gross understatement. Vast majority of ICOs are deliberate scams, not just they aren't building a business, they have no idea how to do it, have no relevant skills, and whole 'idea' is lunatic and would be laughed off by even a beginner angel investor if pitched to him. In many cases, an idea is also technically unworkable due to scaling limits of blockchains used. It is just that: a scam. Not a bubble as in: 1990s tech bubble, or subprime mortgage bubble. There, you got something which didn't follow the profit curve you predicted. Here, you get nothing for your money.

quickthrower22• 9 years ago

A lot of the ICOs have similar looking web pages: modern bootstrap style, touting benefits which are generic benefits of any cryptocurrency, and a list of team members with PhDs and suchlike. You could write a playbook for this crap.

magnetic• 9 years ago

How do they manage to con so many buyers?

vkou• 9 years ago

The big question is, why are people dumping so much more money into ICOs than into Kickstarter projects?

Because an ICO gives you equity, which you can resell to a bigger fool.

People buy into ponzi schemes, too, knowing full well that they are ponzi schemes.

abrookewood• 9 years ago

ICOs do NOT give you equity ... that's what IPOs do. You get coins/tokens, not shares, and you have no ownership stake in the company. There's a big difference and it is exactly why they are running wild. If you got equity, then there would be huge amounts of regulation covering them.

fosk• 9 years ago

People buy into ponzi schemes, too, knowing full well that they are ponzi schemes.

Ponzi schemes are only bad if you are in the last batch of investors. The first ones do get a nice return (otherwise the scheme itself would not last long).

A smart investor could decide to put some money in a Ponzi scheme, as long as he knows what's his number in line, deciding to gradually disinvest some % as times goes on in order to collect the enormous gains.

vit053• 9 years ago

I do not understand your comparison with Kickstarter. You never invest in a company or project using Kickstarter, you will not earn anything in the future if the project succeeds. If you buy a shirt, you will only get that shirt, even if the company sells millions. You can not pass your position on to someone else. The comparison could be with stock exchanges. So the answer is simple. The barriers to starting an investment in ICO are minimal when compared to any IPO. And it is a global negotiation.

Kiro2• 9 years ago

you will not earn anything in the future if the project succeeds

Neither will you with ICOs. They normally don't give any ownership or the like.

DennisP3• 9 years ago

Any decent ICO reserves a portion of the new tokens for the founders, vested for at least a year, so they have an incentive to build something that makes them valuable.

A cap on the ETH to a level that's realistically usable for development can also be a good idea.

xorcist• 9 years ago

why are people dumping so much more money into ICOs than into Kickstarter projects?

Because most of it is "free" money. It's not a coincidence that the great altcoin explosion happened after Bitcoin value had increased by several orders of magnitude, and the ICO explosion happened after Ether had.

Some people bought what they considered a lottery ticket for a few grand, found themselves with a jackpot, and decided to buy another lottery ticket with (parts of) the winnings. It doesn't feel like real money to them.

I don't know if we should feel better about it because of that, but at least it explains why so many of the altcoins and ICOs which are so clearly scams/ponzis can attract so much capital.

nylonstrung• 9 years ago

This is exactly why altcoins are popping now- investors are dumping their free Bitcoin Cash which materialized out of thin air into NEO and a bunch of other coins

throwaway6420• 9 years ago

This. So much. As a developer, I personally feel sick thinking about all the greed associated with cryptocurrency right now. I was an early adopter of both Bitcoin and Ethereum, but I only mined a bit or purchased enough to build little side projects for fun.

Now I have non-technical friends and coworkers who are suddenly millionaires (literally, a friend bragged to me about having a few hundred BTC. He since quit his job) because they decided to dump their life savings into this stuff knowing nothing about it. It frustrates me to no end when I have family members ask, why didn't you buy or mine more? Why aren't you a millionaire? You were so into this stuff, weren't you?

Yeah, I was. As a developer, not as a speculator. It's not just about the markets. But all of the exciting tech constantly gets drowned out by the noise of people going on about lucrative investments and comparing coins to gold. I'm so sick of the hype. I'm disappointed at the lack of millions I could have made (maybe, if I were a serious "hodlr"), but I do actually see value in the tech so it's extremely frustrating...

Distributed ledgers and consensus algorithms are neat. Greed isn't.

quickthrower22• 9 years ago

I wonder how many of these instant millionaires are savvy enough financially and emotionally to handle the wealth. I could see it being easy to lose it all like many lottery winners, or lose friends or become depressed with nothing to do.

lz400• 9 years ago

Occurrences of people getting hacked to the tune of 6 figures are common in bitcoin forums and subreddits. I think by now so many hackers must be rich out of this.

max_• 9 years ago

You sound like some one who has ever made a lot of money. In a flash

da022• 9 years ago

What does it mean to be a Bitcoin millionaire? Did they sell near the highs and buy near the lows? Or do they hang on to it because they hope it will go higher?

sillysaurus34• 9 years ago

If you put $3,000 into bitcoin in early 2009 (EDIT: Actually, mid-2011), you'd have around $1M today.

There's not much sense losing sleep over that statistic though. Most of us had $3k and didn't do that. All you can do is keep your eyes open for the next opportunity, which may never come.

sillysaurus34• 9 years ago

Jacques once said that happiness is accepting what you have, not what you could have.

It's not a direct quote, but the gist is worth taking to heart. It's easy to say, not so easy to do. But you gain nothing by tossing and turning.

nebabyte4• 9 years ago

My guru as far as this lesson goes is Zachtronics. He's a game dev who makes programming games and who created infiniminer, which Notch adapted into minecraft.

Zachtronics' games are some of the most fun I've played, and from a brief encounter (not irl) with the guy he seemed unperturbed (or like he'd made peace if he ever was) by the outcome.

doktrin4• 9 years ago

That's sound advice, but as you said it's easier said than done. Every time I read about BTC, I get sick to my stomach thinking of what could have been. It's very tempting to view money as a possible solution to all of life's problems, particularly for those of us who don't have very fulfilling lives to begin with.

notme7• 9 years ago

This reminds me of a fun story. Back in 2011, our then head of IT kept a server under his desk that nobody but me seemed to notice. It was there for at least a year. One day over lunch he let it slip that it was a bitcoin node, but insisted it wasn't actually mining.

I was at the office one night kinda late, and I walked around the corner to see him working on the server. He was installing what looked a lot like a graphics card. Sure. Not mining.

In the end, he never got caught. I recently looked him up on LinkedIn and he hasn't been working for over a year. I obviously don't know this for sure, but given what a bitcoin enthusiast he was, I would not at all be surprised if he made a fortune mining for free by stealing the company's money and also investing heavily.

Indeed, greed in cryptocurrency is a thing.

(Created a throwaway to protect the privacy of the guilty, even though they don't deserve it.)

sevenfive2• 9 years ago

Back of envelope suggests he was stealing $20k per year in power, probably not more than that. Considering this was 2011, the return on that $20k could have been gigantic. Reimbursing them would have been a drop in the bucket, if he could do it without outing himself...

noddy15• 9 years ago

If you understood and saw the promise, why didn't you load up? If you believe Sathoshi's thesis, and believe that the technology can fulfill the stated function, it is kind of a no-brainer to buy a few/a bunch?

In addition, even now, at $3200, the market cap of bitcoin is still only ~50 billion. If you believe it has a good shot of being a superior global reserve currency, then it is still cheap and you should be glad that you can buy it for $3200.

Most people I know who knew about it but did not buy constantly thought it is worth less than the current price, whether that price is $3000 or $30. So they never buy. Your job as an investor/speculator is to guess what something is worth, not just look at a chart going up and wish you got in at sometime in the past. In addition, you need to realise that the people who really do well in any bull market or bubble are people who did stupid or manic things and managed to catch the upside. Sensible people rarely make outlandish returns. If you are a very level-headed, sensible person, you will not make outlandish returns, especially short-term.

etherael• 9 years ago

If you understood and saw the promise, why didn't you load up?

His answer is right there in his original post, he understands the tech, which is cool, but he doesn't understand money and markets, which is the real reason the entire edifice has any value at all. His observation is akin to being interested in technology purely at the intellectual level, and not understanding how it can serve humanity and fill needs that are desperately unmet in our present paradigm, and people are more than willing to pay to have those needs met. What they already pay to have what we have instead of that is the net economic cost of all states and state controlled financial infrastructure in the world (which, to be clear, I mean all financial infrastructure, because there simply is no such thing as a private unregulated financial instutition outside the bounds of cryptocurrencies), which by comparison make the entire cryptocurrency market cap even now after the rapid appreciation look like the office tea budget.

You need to understand both the tech and its utility to markets, and in turn the real utility of markets to humankind, and imho ideally the terrible threat represented by political authority, to do well out of the cryptocurrency wave. All these people that have loaded up without understanding the technology are eventually going to get taken as that technology matures and differentiates between all the available options, and they'll have no idea how to gauge the actual product level value of one relative to another, and they'll transfer value to those that do.

You can't win with just one side of the equation.

antonvs4• 9 years ago

Your job as an investor/speculator

You missed the part where he wrote that he was into this "as a developer, not as a speculator."

doktrin4• 9 years ago

In addition, even now, at $3200, the market cap of bitcoin is still only ~50 billion. If you believe it has a good shot of being a superior global reserve currency, then it is still cheap and you should be glad that you can buy it for $3200.

I don't really understand finance, so bear with me here : why should being a "superior global reserve currency" entail a stratospheric valuation? The USD has been a de-facto global reserve currency for the last 50 years, yet it's not like an individual dollar is worth 5000+ GBP, CHF, EUR, or JPY.

It seems to me like the high BTC valuation is being driven by speculation. That's fine and dandy, and as the Economist said is part of a "harmless bubble" - but ascribing this insane valuation to some kind of innate feature set of BTC seems to be misleading.

Happy to be proven wrong and/or educated. This isn't exactly my wheelhouse, after all.

alexmat• 9 years ago

This can be said about so many tech innovations, not just Bitcoin.

AstralStorm2• 9 years ago

Not quite. Unlike virtual money other innovations have intrinsic value, however small it may be.

mrb4• 9 years ago

Well, Bitcoin is such an outlier. $1 invested in April 2010 would be worth $1 million today. A insane 1000000x ROI over 7 years. It's nuts. No other investment opportunities even come close to that so it's very, very hard for most people to avoid greed and envy. Not sure what the solution is.

avaer2• 9 years ago

The solution is for the market to correct itself (if it is thus insane as claimed). If that happens it will be very very hard for the greedy to find buyers or sympathy.

elmar• 9 years ago

even better than the founders seed stage of Uber $200,000 -> around 20% of $65B ($13B)

$1 -> $65,000

empath75• 9 years ago

I was going to buy $3000 worth when it was $10 and I was talked out of it. The only way I sleep at night is knowing that I would have sold it when it hit $20.

polotics• 9 years ago

Wow, you got some unkind family members!

warent• 9 years ago

A few million dollars really isn't much. And, once you make a few million, human nature takes over and decides it isn't enough--you always need more. I find it's helpful to count your blessings, and also remember that there's really something to the adage easy come easy go.

nikolay2• 9 years ago

I feel the same way. And I'm ever since disgusted by cryptocurrencies as I see a lot of people who I don't want to be associated with them being the driving force. Also, I believe in distributed ledgers, I respect Bitcoin as being the first, but it's the worst from a technical point of view and wastes tons of energy, which is getting ridiculous!

I would feel the same if I started Google - to build something cool like a powerful search engine just to sell ads. Ewww!

There are better and worse ways of making money. Crypto speculation and ads are the some of the worse, in my opinion. Charge for your service - it's the only honorable and clean thing to do. Don't be a sellout!

Shortly put, I do believe in the blockchain, I don't believe in Bitcoin, which is majorly driven by low-class Chinese speculators and exchanges!

noddy15• 9 years ago

I don't think the google founders started the company "just to sell ads".

It is just how they make money. What they DO is make the best search engine, host every video and livestream anyone on earth wants to upload, run the best email service on earth, run the best cloud office suite etc etc.

rebootthesystem2• 9 years ago

I think you are reading it wrong. It isn't about greed. It's about recognizing an opportunity and having the drive and interest to jump on it, sometimes at great personal risk.

I have failed to recognize and/or act on a number of opportunities so far in my life.

One was when the consumer Internet was "waking up". Domain name registration was free. And, even later, as Network Solutions started to charge for them, domain names, good one's, were plentiful.

And so, there I sat, living through the technical birth of the Internet, fully understanding it from an engineering perspective and yet, due to my lack of experience at the time, never made the mental connection to the opportunity that lay ahead. While other less technical people gobbled-up tons of good and very valuable domains I was geeking out making use of the embryonic consumer Internet. These people made millions. I did not.

Another missed opportunity happened during the economic downturn of 2008. The market crashed. I had been a day trader a decade earlier and have always kept a level of awareness about the market. I was on the phone with a friend and made the comment that Ford was an absolute goldmine as it had dropped down to about $1.50 per share. The company had none of the problems the other auto makers had. It just got dragged down with the rest of the market. It told him I should get off the phone and buy 100K shares of F.

In other words, I recognized the opportunity and had the ability to take advantage of it. Yet, I did not. I would have made somewhere in the order of $1.7 million inside of a year and a half or so.

I'm sure people who also recognized the opportunity and brought themselves to pull the trigger made a killing. I, for some strange reason, did not.

I look at cryptocurrency and your comments the same way. You probably recognized the opportunity yet did not act. This has nothing to do with being intelligent or dumb. I have no clue what it is but it happens.

I wouldn't feel bad about it at all. Plenty more opportunities ahead. Just try to grab onto of one when the time comes.

jacquesm3• 9 years ago

Luck favors the prepared. I've slowly woken up to this stuff over the years, I figure in your life you'll have somewhere between 1 and 10 of such opportunities, how you handle those will make all the difference in how you'll live the remainder of your life.

In my life so far:

- electronics

- digital

- computers

- the web

- cellular communications

- smartphones + app ecosystems

- crypto currencies (in progress)

- deep learning (in progress)

jahnu• 9 years ago

I'd love to know what % of BTC trading is speculation and what % is non-BTC related trade.

tednoob• 9 years ago

I think I would say that I have some regrets not buying/mining. When I first heard about bitcoin I thought that it was pretty neat but I did not want to support it because I thought it is such a waste of exergy.

DennisP3• 9 years ago

I'm a full-time developer on Ethereum, and also wish I'd bought more early ETH. But developers who understand this stuff are in high demand right now, and there are all sorts of opportunities. There's plenty of money to be made by working instead of just hodling.

mattm• 9 years ago

In order to bootstrap a currency you need the price factor to interest lay people and generate adoption. There is no other way. I haven't seen the argument lately, but in the early days when the price started to rise, there was a lot of complaining from people who wanted the price to be stable.

Stability is boring. It doesn't garner attention. It's the high fluctuations that generate interest and bring in new people to the ecosystem.

Without it, Bitcoin would have been basically another technology that most people would have never heard of.

grey-area2• 9 years ago

Or, you could make it useful rather than a vehicle for speculation. There are plenty of other ways.

p0nce• 9 years ago

I'm just fed up hearing about cryprocurrency. I have no interest in "better currency" and the topic keeps coming like it will change anything.

aerovistae• 9 years ago

Why did this require a throwaway? unless you're a well-known bitcoin contributor, which would be entertaining.

ploggingdev2• 9 years ago

Regarding ICOs, I have noticed a fair number of submissions to HN titled something along the lines of "[Insert market] ICO : sale opens [date]". These submissions are from new accounts with newly created Github and other social media handles with an anonymous user behind the submissions. Most of the submissions get flagged and the ICO never happens. Do these people think they can raise hundreds of thousands or millions of dollars anonymously with newly created accounts? It just screams scam.

All of the successful ICOs seem to have a team full of PHDs, investors, and seasoned entrepreneurs and they also have commitment from a few well known investors and entrepreneurs as social proof. Some even have "pre ICO sales" to reward their inner circle.

For people in the know, I have a few questions:

* Who invests in these ICOs apart from the "pre ICO investors" who are generally close friends of the founders?

* How do ICOs reach these people (I'm guessing a subset are clueless retail investors and the average Joe who gets excited by the words blockchain, cryptocurrency and ICO)?

* What is the legal status of ICOs?

* Are there any case studies regarding how successful ICOs take place?

(I have no plans of starting my own ICO, just want to understand how these ICOs work.)

noddy15• 9 years ago

Who invests: - Some of the hundreds of thousands of people who have made big $ in crypto - especially ether
How do ICOs reach these people: - There are numerous forums/chatrooms/reddits/twitter posters etc etc. One of the common tricks is for ICOs to reward 2-3% of tokens in "bounty programs" which basically rewards participants for facebook/forum/blog/youtube posts/spam. Very large ICOs like bancor have done this
Legal status of ICO's - Unclear, but they are global and switzerland - where many of them are based out of seem to have liberal laws. For the SEC they seem to have indicated that you are likely to get in trouble if ICO's are more equity based, whereas "token" based network payment stuff is less clear.

The high early liquidity of ICO's basically mean that if an ICO has capped investment and has any sort of credibility, the ICO will reach its cap rapidly and when it opens on the exchanges it'll be up 3-10x and you can dump it and make a fortune, regardless of whether it is actually vaporware or a ponzi. This does not really happen in the past 3 months as the high demand ICO's generally take as much money as possible and don't cap it.

I think its sad that this business is going the way of the venture capital biz where well connected people get early/cheap dibs and average joes only get in once all the potential gains have been sucked out. Compare this to the ethereum ICO where everyone really got a fair short. I also think that if these have ponzi elements, being a preferred/connected/private investor in a ponzi makes you complicit in the ponzi scheme, whereas being an average joe just means you're playing the game.

ploggingdev2• 9 years ago

How do ICOs reach these people: - There are numerous forums/chatrooms/reddits/twitter posters etc etc.

Can you post a few links to the forums/chatrooms/subreddits/twitter accounts?

pmorici2• 9 years ago

Who invests in these ICOs?

Mostly idiots. or people who think they can pump the price and flip it to a greater fool before the "founders" exit scam everyone.

How do ICOs reach these people?

Reddit forums, Ads on crypto-currency related sites (ie: coindesk.com, etc...) and on Facebook etc...

What is the legal status of ICOs?

SEC says[0] if you operate your ICO like a securities offering then your tokens are securities and you are subject to applicable federal laws.

[0] https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_co...

Are there any case studies regarding how successful ICOs take place?

No idea, most ICOs I'm aware of are hugely problematic and on the grey side of ethics at best. If the founders are pre-mining/keeping a large portion of the coins for themselves I would stay way far away. Bitcoin by contrast wasn't an ICO the only way someone got Bitcoin was by mining it.

aqsheehy2• 9 years ago

Blockchains are for dark net markets. Everything else is Ponzi pumping.

antonvs4• 9 years ago

Don't tell that to the global enterprise whose blockchain projects I'm working on.

foepys• 9 years ago

What general problem does your company want to solve that is not possible (or harder) with a traditional system like a central database?

burger_moon• 9 years ago

It's kind of funny seeing the development of large companies on blockchain tech. If they don't invest in researching the potential they can be left behind and everyone will criticize them for being against new tech, but if they do invest into researching it, then they're just chasing buzzwords. It's incredibly frustrating to read some of these comments when people speak up about their companies investing in new tech and being shunned for it.

tradersam• 9 years ago

I work for a huge company where a mouse is the boss. We are looking into blockchains very seriously. (Obviously not speaking for them, just saying.) Since that is the case, I don't think your assessment is correct.

aqsheehy2• 9 years ago

Buzz words are a hell of a drug

tome• 9 years ago

A mouse?

balladeer• 9 years ago

In a way it seems the early adopters and hoarders are rich or are going to be rich and every one else, including people who think even now there's an opportunity and they are going to invest, are going to make that happen.

known• 9 years ago

Decentralized + Private + Cloud + Immutable + AUDIT TRAIL https://science.slashdot.org/story/16/11/21/0622255/walmart-...

BLanen• 9 years ago

There is no reason that can't be done with a traditional database.

gpvos2• 9 years ago

Dumb question maybe, but if you bought bitcoin at the right time and now have $ 1 million worth of them, is it actually possible to convert such a large amount to dollars right now, and where would you do that? What if it were 10 million, 100 million, a billion?

dharma1• 9 years ago

A couple of million - on most large exchanges. Prob don't want to sell it all at once

aedron• 9 years ago

The daily volume is something like 20 million dollars. So yeah, a million will be moved quite easily.

runeks2• 9 years ago

You can see the depth of the various exchange’s order books on bitcoincharts.com. For example, if you sold 4000 BTC on Bitstamp right now, the price would fall from ~$3250 to $2300, and you would earn ~$11m: https://bitcoincharts.com/markets/bitstampUSD_depth.html

Selling ten times that (40.000 BTC) would only net you ~$26.5m so, to answer your question: selling just $10m worth of BTC on a single exchange will move the price significantly. For $1m worth of BTC you’d move the price very little.

cesarb• 9 years ago

That's assuming none of the orders will be pulled before they're filled.

pmorici2• 9 years ago

Yes, but why would you? If you understand it well enough to have hung on that long you understand that the full potential is a lot higher than where it is now.

gpvos2• 9 years ago

Maybe you want to buy a nice house or yacht, because you think those are more practical and/or fun than a number in a database/blockchain. Obviously, you'll leave as much as possible in bitcoin.

codingmyway4• 9 years ago

Bitcoin yes, definitely, Ethereum maybe, other crypto tokens that have gone up as much or more like Stratis or NEM probably not without a large drop off as you affect the market (can't remember the technical term)

codingmyway4• 9 years ago

Slippage is the word I was thinking of.

proofofstake• 9 years ago

Every time Bitcoin hits an all-time-high, these news articles get posted. "Oh, it's all a bubble! Surely, it will all come crashing down.". But now you also see analysis posted like: http://fortune.com/2017/07/03/goldman-sachs-bitcoin-price/

Anecdotally, but you can also see the trends in wallet increases, nearly everybody I know under 30 owns crypto.

Will there be a bubble bursting? Sure, much like the dotcom bubble, crypto will see its downtrend too. But look where we are now. Businesses like pets.com could thrive.

Not all early internet developers got rich. People who bought domains like pets.com and pizza.com got rich, and they did not need a lot of technical know-how. If they did, the internet would have always been the playground of highly technical people, and would not have seen wide adoption or eternal Septembers.

I first got into Bitcoin around 2013 after lots of articles were posted about it on Hackernews. Second stint in 2015. Finally started again two months back. There is still (a lot of) money to be made. Some people say I missed the boat by not buying the outlier BTC when it was 1$, but I could have also bought it at 50$ or 200$. Heck, you think Bitcoin is going to stay at 3300$ forever? Ethereum was 1$ 2 years back. That's a 200x-300x ROI there. I have no doubt some newer coins will do an easy 5x in 12 months. Past two months for me have been life-changing (possibly life-changing for my family too).

Some of these crypto companies are going to be the next Google's. Or they will use their winnings (or ICO) to bootstrap a competitor.

Are there scammers, hackers, hoaxers? Yes, it is still very much the wild west. Compare your email box around 2000, and the amounts of spam you had to sift through. Some less tech savy and/or naive people will get suckered in and some people will invest more than they can stand to lose. This is unfortunate, but beyond my control. I may even make some money of their irrational behavior. But people who read HackerNews? I've no doubt they can sift through the crap to find the diamond mines in the making. To spot if a team is technically advanced or just faking their marketing and headcount.

About the blockchain. To me it is like the early days of the internet ~1997, but for the financial world. It has the potential to disrupt Central Banks, FinTech, Money Transfer, Micropayments, Identity & Privacy, Money lending, Smart Contracts, Provenance, IOT, ... Far from boring, far from bubble.

This month will see the third wave of large-scale Bitcoin interest. I've spoken to web developers that are learning blockchain and smart contracts to prepare 3-5 years out. People are actually betting their livelihood on this technology. Is that a guarantee that the crypto market cap will increase? No, but it is a sign of the times we live in and the sweet spot that Bitcoin hit this month.

XorNot• 9 years ago

This was all true of subprime loans right up till 2008. And plenty of people bet their livelihood on those as well.

codingmyway4• 9 years ago

Domain names were the bitcoin of the dot com bubble. The digital asset that if you got in early has largely gone up ever since.

roberdam• 9 years ago

The point with cryptocurrencies is that it's a coin with two faces, the technical side and the speculative side, and most of the time one is not related with the other, and makes no sense for us technical guys because the tech is not related to the valuation.

BUT if you understand that there are two (non related) faces of the same "coin" (pun intended) , you can use your technical expertise to have an edge on the speculative side, why all the craziness with crypto? check out this stats: https://icostats.com/roi-since-ico

Where in the world you can bet 1000$ and earn 1.000.000$ ? , Are all ponzi schemes? Definitely many are totally scams but many of them are here to stay as a part of the future.

Now do this exercise, pick a number from 1 to 100, done?, go to this link and check your crypto with the number you pick searching it by the first column. https://coinmarketcap.com/historical/20170101/

Write the coin the price on January 2017, now go to : https://coinmarketcap.com/

And check If you had bought 1000$ at the first price how much did you win or lose today, you can answer this exercise if you want here!.

My point is, why not use our technical expertise to separate the wheat from the chaff?, understanding that you are playing on the speculative side with the help of your tech expertise the odds are in your favor.

What do you think?

codingmyway4• 9 years ago

I take heart in knowing that most of the people who made money were developers, especially from ethereum which I bought to play with.

Be careful of getting emotional about it. It could well be techies and goldbugs who knew about it early on and regret not buying earlier that succumb to fomo last after stewing over it too long.

It's best to buy just enough to assuage your feelings so that you're comfortable with whatever happens and then forget about it.

With so many being created, cryptocurrencies will come and go so speculating on which will become the winner is a time consuming obession. As dev Andreas Antonopolous says the best investment you can make is in learning the tech.

Solidity and other smart contract developers are in serious demand, paying stupid salaries as every finance company plows money into them. The space is still full of opportunities for developers if you look forward and around and not back.

IanDrake• 9 years ago

the value of which is then inevitably measured in… US dollars, which says something.

Which says a lot. These are crypto commodities at best. The real currency is the US dollar.

I really wanted crypto currencies to work, instead they've made me see the value in the Federal Reserve System even though I don't like the way it's run.

The promise of a systematic currency supply growth was enticing, but now I see what spiking demand can do with a fixed supply. Perhaps this is a problem that could be solved via a new supply algorithm.

Beyond the boring blockchain bubble

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